There is one downside from New Zealand agriculture and our economic future from the recent (and its appears ongoing) surge in primary products prices.

It is delay, perhaps irretrievably, of consumer-centric changes required in the way we market, as opposed to flog off at the highest price, our meat, wool, dairy and wood products.

The commodity boom’s bad for branding is another way of saying it.

During these times of high prices, there’s not the same incentive or passion or need to extract more value from what we produce.

Everyone in the current supply chain; and let’s not kid ourselves that we have a value chain; can rest easy.
Everyone can clip just a bit more of the ticket, and tweak up their margins. After all, such are the prices being paid by bulk buyers, no one really have to think too much about the end consumer.

Such are the current, perceived, commodity premiums, while New Zealand produce might receive a small country-based price advantage, no exporter really has to, or will feel like chasing the high end customer.

For dairying, the country’s biggest miner, it will mean continuing down the path of bulk milk powder.

For sheep and beef, it will take away the pressure to enact some of the good ideas and suggestions of the Red Meat Strategy, recently delivered by a partnered up Meat Industry Association and Beef + Lamb NZ.

For wool, it takes much needed heat out of the Wool Industry Research Ltd.’s $17m co-funded project to look into new ideas and uses for the ancient fibre.

For forestry, well, we’ll just keep on pumping out those logs and exporting them.

All the models of extracting greater value from the market are predicated on getting closer to the consumer – preferably with branded products.

The commodity boom ain’t going to help that notion.

Which is a pity.

Because the one glaring flaw in New Zealand’s agricultural history, is we don’t own our story.

We don’t have a name for the production method, which is essentially sustainable pastoralism, which over 100 years we’ve perfected.

What we could have is a type of ‘Intel Inside’ attribute on every piece of product sold from our country.
We’re the only protein production method that can say, VISIT, but without a brand, we can’t say that.

But the commodity boom means we’ll be treated like every other agricultural commodity.

We’ll continue with no differentiation, no means to pointing out to affluent people who care, that what they’re eating or wearing has a specialness based on where it comes from and how it is produced.

While not bemoaning the income fillip for farmers and the wider economy, perversely the commodity boom will do us no good in the long run.

Peter,
Good point and it is likely many exporters will fall into this trap, likewise alot of sheep & beef farmers will take there thoughts away from changing the industry to make long term gains. But it isnt all like that. Note this year Fonterra is likely to outpay its non cooperative rivals on all fronts both on straight milk payout and it will register a good profit whereas the non-coops are likely to record losses, meaning Fonterra’s value add strategies iare starting to work. In addition on the meat front returns at the farm gate are at historical highs right now, but meat processor margins are being pressured. They need change right now to ensure survival so perhaps there is quite an incentive to pay more than lip service to the Red Meat Strategy.

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